Minimum wage hike gets push from Assemblyman Luis Alejo

WATSONVILLE -- This time, Luis Alejo's attempt to raise wages for workers on the bottom rungs of the state's economy may go forward.

Entering his second term, the Democratic assemblyman from Watsonville has made raising the state's minimum wage a centerpiece of his agenda. The effort died last session, but as the new one gets under way in earnest, there are signs a new minimum-wage bill could see the light of day in Sacramento.

"When workers make more, they spend more," Alejo said. "Raising the minimum wage will only create more consumer spending, which will only help improve our economy."

The bill would increase the state's minimum wage over three years to $9.25 an hour from its current $8. The highest current statewide minimum is Washington's $9.19, and the federal minimum is now $7.25.

Furthermore, the bill would tie the minimum wage to inflation, meaning it would rise (or fall) along with the cost of living. Alejo said he has talked with labor and business groups about the bill, and hopes to reach common ground with both.

"I've seen more support now than in the last two years," Alejo said.

California's minimum wage makes it one of 19 states with minimums higher than the federal standard. Ten states saw Jan. 1 wage increases, with many due to automatic increases. According to the Bureau of Labor Statistics, just 139,000 of California's 8.7 million hourly workers make at or below the federal minimum, or 1.6 percent. Only Oregon has a lower rate.

The Community Action Board of Santa Cruz County serves low-income residents through a variety of services, including several employment-related programs. About four out of five clients live in poverty, and even those don't can struggle in a county with a sky-high cost of living.

"One of our main goals is to help people become self sufficient. One of the best paths to self sufficiency is an increased income," said Tom Helman, the Community Action Board's assistant director. "We would see (the bill) as a good development for the people that we work with."

Without question, Santa Cruz is an affluent county, with pricey home values and median household income far above the statewide average. But poverty rates, including those for children, have gone up during the past decade, and private, nonfarm employment dropped more than 14 percent during the same time, according to U.S. Census Bureau statistics.

The widening gap between the rich and poor has persisted during several decades. Californians saw $219 billion more in income from 1987 to 2009, but 35 percent of that money -- $77 billion -- went to 144,000 taxpayers making up the state's richest 1 percent, according to a 2011 study by the California Budget Project.

That study also found that if the state's 1968 minimum wage had kept pace with inflation, full-time minimum wage earners would see $6,000 more annually than they do now.

Alejo said the purchasing power of low-wage workers has diminished with rising food, gas and clothing prices. He also pointed out that California's western neighbors of Nevada, Oregon and Washington all have higher minimum standards than the Golden State.

Last year, an Alejo bill that would have tied the state's minimum to inflation died in committee. But Assembly Speaker John Perez is entering his final term in office, has supported past minimum wage increases and is allied with unions that support Alejo's effort.